What are the labor implications
of Supreme Court’s decision in King v. Burwell?
Current NLRB majority seeking big changes for joint employer
bargaining units
Federal court in Texas rejects challenge to new NLRB “quickie”
election rules, employer groups appeal
The first two months of life with the NLRB’s quickie election
rules – what’s happening?
New “Persuader Regulations” are on the way, probably at the end of
the year
The Good, the Bad and the Ugly
Is this good, bad, or
ugly? NLRB says it will have all Noel
Canning-affected cases cleared by June 26
Machinists union agent to worker: “Shut
up, or IAM going to beat your a**, and IAM going to get you fired, too!”
NEWS
& ANALYSIS
What are the labor implications of Supreme Court’s decision in King
v. Burwell?
- On June 25, the U.S. Supreme Court upheld the Affordable Care Act (also known
as “Obamacare”) in a 6-3 decision written by Chief Justice John Roberts. Legal
analysis seemed to take a back seat to practicalities – primarily, concern
about the chaos that might ensue if the law were stricken down at this late
date. The majority essentially found that the four-word phrase “established by the State”
meant “established by
the state and the federal government.” Apparently, the majority
found that the law needed to be saved if it was to be a law and that it
couldn’t survive if interpreted as written. In dissent, Justice Antonin Scalia
blasted the majority for its “jiggery-pokery,” which is defined in the
dictionary as “dishonest or suspicious activity.” (But when “state” means
“state and federal,” maybe dictionaries just get in the way.)
The labor issues? The decision means that ACA tax credit subsidies will be
available to health insurance consumers in the many states that do not have
exchanges. Employers will continue to deal with the legal and regulatory
landscape of the ACA, with some continuing questions about how the law is going
to be applied. Several challenges to parts of the ACA are still pending, but
the structure of the law will probably stay intact absent legislative action,
which is unlikely as long as President Obama remains in office.
In 2018, the so-called “Cadillac plan” tax will take effect. This is a 40
percent tax on insureds for employer-paid health insurance plans that are too
“rich” (that is, they exceed a cost of $10,200 for an individual and $27,500
for a family). The tax applies to every dollar of insurance cost above the
thresholds. The idea is to penalize “wealthy” employees who buy extravagant
plans and to encourage cost-conscious shopping for plans with more limited benefits.
A “Corolla plan” would mean less demand for medical services and less growth in
medical costs.
But this “Cadillac plan” tax will not affect only the wealthy. Many
participants in jointly-managed Taft-Hartley Fund health insurance plans
(sometimes called “union plans”), as well as participants in typically generous
government employee benefit plans, will be hit by the tax, absent reductions in
the cost of the plans they currently have. Reports are already circulating
that, to avoid the Cadillac plan tax, many union and state employee plans are
increasing deductible levels and out of pocket maximums to bring plan premiums
below the thresholds.
The Cadillac plan tax has the attention of organized labor and its lobbyists.
Even before the effective date of the ACA, labor unions began lobbying the
White House to give union plans an exemption, but to date they have had no
luck. Some Republicans in Congress may be on their side, given that the U.S.
Chamber of Commerce has opposed the tax. Watch for more efforts from organized
labor and business interests opposed to the tax to try eliminate it. Nothing
new there, except for the possible “strange bedfellow” relationship between
unions and pro-business interests.
Current NLRB majority seeking big changes for joint employer
bargaining units.
- The National Labor Relations Board recognizes the concept of joint employment
– that a single employee can have more than one “employer.” As we
have previously reported, the Board is considering arguments that the
standard for "joint employment" status should be loosened and is
expected to relax the standard in one of several pending cases. Countless
business and operations models based on use of contingent, leased, or temporary
employees, contract operations, franchises, and similar relationships are
likely to be disrupted as a result. This is part of the multi-faceted attack on
what Obama administration representatives and appointees have called “fissured
industries.”
Now, foreshadowing another change in established Board law, the Board has
granted a petition for review of a Regional Director’s unit determination in a
representation case, Miller
& Anderson, Inc., raising the following issue: if an entity
is found to be a joint employer with its contractor-supplier, can a union
organize and represent employees in a unit where some of the employees are
jointly employed and some are not? Under current law, the answer is “No,” on a
theory that such a situation involves multiple employers and that multiemployer
bargaining requires the “consent” of all employers.
Many commentators suggest the Board will use the Miller & Anderson case to find
“appropriate” bargaining units consisting of a mix of jointly employed and
non-jointly-employed workers. If so, the Board will probably overrule its 2004 Oakwood
Care Center decision and return to the M.B.
Sturgis rule that Oakwood
Care overruled.
In 2004, the Board in Oakwood
Care found that proposed bargaining units combining (1)
directly-employed employees of one employer and (2) temporary (or contract)
employees employed by two or more joint employers were inappropriate unless all
affected employers consented. Oakwood
Care represented a return to the law as it existed before a Board
decision in M. B. Sturgis,
which reversed longstanding Board precedent in 2000 by holding that such a
“mixed” bargaining unit could be appropriate without both employers’ consent,
so long as the employees had a community of interest.
The Board, in its May 18, 2015, Order granting review of the Regional
Director’s decision in Miller
& Anderson, indicated that it will be requesting amicus briefs on the
issue, possibly following the well-traveled path of first asking for such
briefs and then making big changes in established Board law. Given the current
makeup of the Board, we anticipate that the Board majority will resurrect the M.B. Sturgis rule and
overrule Oakwood Care.
Such a result, coupled with the Board’s expected loosening of the standard for
finding joint employment, will give unions seeking representation in jointly
employed workforces many more options to target for organizing. Organized labor
argues that the M.B. Sturgis
rule better takes into account the realities of the modern workplace.
Employers, on the other hand, argue that the National Labor Relations Act
specially mentions the “employer unit” and that the M.B. Sturgis rule ignores conflicts inherent
between “user” and “provider” employers and their employees. Businesses using
temporary or contractor employees side by side with their own employees should
be prepared for a likely change in the law.
Federal court in Texas rejects challenge to new NLRB “quickie”
election rules, employer groups appeal. - On June 1, Judge Robert E. Pittman of the U.S.
District Court for the Western District of Texas rejected
a challenge by several employer groups to the new NLRB “quickie” election
rules that went into effect on April 14. The plaintiffs are appealing Judge
Pittman’s decision to the U.S. Court of Appeals for the Fifth Circuit.
This is one of three well-publicized challenges to the rules filed by employers
and employer groups (and, in one case, by several employees). The other
two challenges are pending in federal court in Washington, D.C.
Judge Pittman, in granting the NLRB’s motion for summary judgment, ruled that
the plaintiffs failed to show that “no set of circumstances exists” under which
the NLRB rules would be valid. In so ruling, he rejected arguments that the
rules denied employers a right to an “appropriate hearing” and violated
employers’ rights to free speech. He held that the Board regulations allowed
employers to raise legal issues related to voter eligibility post-election and
that employers had time to get their message out to voters before the elections
and could even begin “talking” about elections before a petition was filed. He
also rejected the employers’ claims that the rules were arbitrary and
capricious, noting that the Board adopted them only after a long process.
The Texas decision is a setback to those challenging the rules, and the judge
in Washington, D.C., who is hearing similar challenges, sent notice to the
parties in those cases that she is aware of the Texas decision and needs no
supplemental briefing on it. Employers and their representatives will be
watching the D.C. cases and the appeal of this Texas decision. Even if all the
challenges to the rule fail, there may be opportunities to challenge the application of the rules
in specific circumstances. Employers and their representatives are expected to
raise challenges to the rules in any contested election proceedings before the
Board, in order to preserve the argument that the rules are invalid.
The first two months of life with the NLRB’s quickie election
rules – what’s happening?
- Data and reports about the impact of the new NLRB quickie election rules are
coming in. So far, it appears that unions are filing petitions at an
unprecedented rate now that the path to election is shorter, and streamlined to
the advantage of union organizers. A backlog of union “petitions-in-waiting”
may be clearing out.
Early reports also indicate that unions are frequently filing petitions and
then withdrawing them before any election, raising the question whether these
are “tactical” filings intended to get organizing information from employers
through the Board’s new information disclosure requirements.
Finally, the predictions of shorter petition-to-election times have come true.
Several reports have attempted to calculate average time from petition to
election. The methodologies are subject to “wrinkles” caused by various factors
(including somewhat tricky and ambiguous Board data), but the early reports
indicate that the time from petition to election is averaging less than 30
days, and is probably about 24 days. Expect this number to tighten even more as
Regional Offices of the Board get accustomed to the new rules and get better at
cutting days out of the process. Before the new rules, the time from petition
to election generally was in the range of 35 to 42 days, so it appears that
about two weeks of the typical “old school” campaign are gone. This is not a
surprise, given that many possible issues for contested hearings are gone and
employers are thus stipulating to election agreements, making the best of the
situation presented by the new Board rules and NLRB Regional Offices that are
taking their cue from the current pro-organizing Board majority.
New “Persuader Regulations” are on the way, probably at the end
of the year. - As
we have previously reported, the U.S. Department of Labor has long wanted
to revise the persuader rules under the Labor Management Reporting and
Disclosure Act. The regulations require employers and their labor consultants
engaged in “persuader activity” to file extensive reports about use of
consultants and lawyers. There is an “advice exemption,” but the DOL in
proposed regulations has indicated that it wants to narrow the exemption, which
would mean that many more entities will have an obligation to report. The DOL
has held back on issuing new final regulations, and in its Spring 2015 Unified
Agenda it listed December 2015 as the earliest date for issuance of new
regulations. Rumor has it that the new rules will be effective by year end. If
the rumors are true, the proposed rule should be released in the fall.
THE GOOD, THE BAD AND THE UGLY
Is this good, bad, or ugly? NLRB says it will have all Noel Canning-affected cases cleared
by June 26. -
NLRB Chair Mark Gaston Pearce testified before a Senate subcommittee on May 14
and said the Board was on track to clear the last 16 of 103 cases on its docket
that were affected by the
U.S. Supreme Court decision in Noel Canning, which
held that the “recess” appointments of Richard Griffin Jr. and Sharon Block
were unconstitutional. That may be good news to some, but still percolating
through the system are Board cases and decisions by administrative law judges
that have been affected by the invalidity of those decisions from the Noel Canning period. For
example, ALJs of the Board in several cases have found that the decision in Alan
Ritchey (finding a duty to bargain over disciplinary matters
before an employer and the union enter into an initial collective bargaining
agreement) was not binding precedent because it was issued by an invalid Board
panel. Similarly, just beating the stated June 26 date, a panel of the current
Board “reversed” a decision by an invalid panel in Fresenius
USA Mfg., Inc. Who is going to make restitution to the economy
and to employers, employees, unions, and the Board itself for these duplicative
and wasteful proceedings? Apparently, it seems, no one.
Machinists union agent to worker: “Shut up, or IAM going to beat
your a**, and IAM going to get you fired, too!” - Two union dissidents prevailed
before a Board ALJ on their unfair labor practice charge that their union,
a local of the International Association of Machinists, had threatened bodily
harm and helped get them fired from Spirit AeroSystems in Kansas. The
dissidents had forwarded a video clip of a motor vehicle accident to a number
of people inside and outside the company. A union’s in-plant representative
apparently got the email and sent it to company officials, asserting that it
violated various company policies, including privacy, security, photography,
and computer use at the facility. The company fired the employees, and one of
the terminated employees then came to the plant to campaign for a dissident
union candidate in an internal union election. The IAM agent allegedly told the
former employee “to shut up before I beat your a**” and that he would make sure
the employee was not reinstated.
The union has indicated that it is disappointed with the ruling and will seek
review by the NLRB. No surprise there. The real surprise will be if the Board
agrees that the Union should be held accountable.
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